A West Yorkshire Police spokesman said: "A 41-year-old arrested on suspicion of fraud offences answered his bail and was arrested in relation to further allegations of fraud. He has been bailed pending further enquiries.

"All aspects of the school finances and governance that relate to these potential offences and allegations are being thoroughly investigated."

Meanwhile, a group of protesters, apparently including some parents, gathered outside the controversy-hit free school late yesterday afternoon.

Leaflets handed out by the demonstrators contained a statement saying 'We trust in Mr Raza's vision of educational excellence for every child' and listed a raft of concerns about the way the school is now being run.